NJEA leadership wasted $45 million of New Jersey teachers' highest-in-the-nation dues on NJEA President Sean Spiller's vanity run for governor and deliberately hid the truth from teachers.

The $45 million was by far the most money ever spent on a gubernatorial candidate in New Jersey history, yet Spiller was such a weak and controversial candidate that he finished a distant fifth out of six candidates for the Democratic nomination, winning a mere 10.7% of the vote.  It was a profligate waste of teachers' hard-earned dues.

Even worse, teachers clearly showed that they did not support Spiller's run, but leadership -- including President Spiller -- took the money anyway and violated the NJEA's own conflict of interest policy. 

That's why NJEA leadership hid the truth from teachers for years.  Teachers had no idea their dues were funding Spiller's vanity run until the very end of the primary campaign when the truth emerged from news reports.  By then, the $45 million was already out the door.  

It's a scandal of historic proportions. Will there be any accountability? 

New Jersey teachers are not nearly as well paid as the NJEA's parent, the NEA, claims.  According to the NEA, teachers in states with collective bargaining (like New Jersey) have 26% higher salaries than teachers in states without it.  The NEA ranks New Jersey 6th, while the two largest states without collective bargaining - Georgia and Texas - rank 20th and 29th respectively.

But the NEA data is flawed: it does not account for the real world of taxes and cost of living that New Jersey teachers actually live in. Sunlight found that once New Jersey's very high taxes and cost of living are accounted for, teachers in Georgia had 4.2% higher salaries, and Texas 3.2% higher.

By misleading teachers with claims of higher salaries, the NEA does New Jersey teachers a disservice. Teachers should know that their salaries are not nearly as high as claimed and that they are actually underpaid compared to other states like Georgia and Texas.  

They neglected their members’ pensions while taking care of themselves.

When it comes to their pensions, New Jersey teachers have a lot to be upset about. Nearly half of them have significantly reduced pensions.  All of them have pensions that are severely underfunded. How did this happen?

The facts show that in the 1990s and 2000s NJEA leadership made fateful and ultimately disastrous decisions. They bet teachers’ pensions on gaining them the non-forfeitable right to their pension benefits. They took the lead in political deals that allowed “surplus” assets to be substituted for required pension contributions. They irresponsibly enhanced benefits without securing sound funding for them. They looked on while TPAF’s unfunded liabilities climbed to unsustainable levels. They allowed TPAF to deteriorate until insolvency threatened.

And then they were forced by political reality to accept the Chapter 78 reforms because the pension system was in crisis. Yet the non-forfeitable right ensured that most of the pain was inflicted on prospective teachers in the form of reduced pensions.

Meanwhile, using the dues of those very same teachers, NJEA leadership made sure their own pensions were both gold-plated and overfunded. NJEA leadership took care of themselves but not their members. They have a lot to answer for.

TPAF is still only 34.7%-funded, or 47% including lottery assets.

New Jersey’s largest pension plan, the Teachers Pension and Annuity Fund (TPAF), is not healthy.  Despite the record-billions Gov. Murphy has contributed and the addition of 78% of the state’s annual lottery proceeds, TPAF is still reliant on positive investment returns to avoid having to deplete its assets to meet its annual benefit payments to retirees.

As a result, TPAF is treading water. In FY2021, pension investments posted a record 28.6% return and TPAF’s assets grew by $5 billion. In FY2022, investments lost -7.9% and assets shrunk by -$2 billion.  So despite strong returns of 9.2% in FY2023, assets only grew by $2 billion. Meanwhile TPAF’s liabilities continued to grow by $2 billion a year. The result: TPAF’s FY2023 34.7% funded ratio (the amount of money set aside to pay for future liabilities) was actually lower than FY2021’s 35.5%.

A 34.7% funded ratio is not healthy. TPAF’s internal dynamics are so weak that even with Gov. Christie’s addition of the $9.6 billion lottery asset, TPAF’s liabilities were still only 47%-funded.

Murphy’s state budgets have benefited from large, pandemic-related revenue windfalls that have allowed him to massively increase pension funding, but a deep recession could change the picture dramatically.  Yet Murphy continues to refuse to do the the hard work of restructuring TPAF.  To please his biggest political supporter, the NJEA, he is continuing to pour billions of good (taxpayer) money after bad.  Good for Murphy and the NJEA, terrible for the teachers and the state.

Even after Governor Murphy spent billions for additional funding, the Teachers’ Pension and Annuity Fund (TPAF) was 33.9% funded for FY2022.  That means that the state has less than 34 cents set aside for every dollar it owes to retirees.  This is a crisis condition.

That’s why a recent Urban Institute study placed TPAF in the “Deep Red” category — as one of the nine worst public pensions funds in America.  TPAF is projected to run out of money in 20 years or less, which would be a disaster for New Jersey.

FY 2022 shows why. Because TPAF is structurally unsound, poor investment returns meant that TPAF had to sell $1.89 billion in assets to meet its annual payments to retirees.  Meanwhile, TPAF’s liabilities continued to climb.  The result was a 33.9% funded ratio.

Yet Murphy continues to refuse to do the the hard work of restructuring TPAF.  To please his biggest political supporter, the NJEA, he is pouring billions of good (taxpayer) money after bad.  Pandemic-related revenue windfalls have allowed Murphy to increase state spending to record levels, but what happens when these windfalls go away?

When teachers learn the facts about excessive executive compensation and political spending, many choose to leave the NJEA.

That’s why the Wayne Education Association is asking the state to force the Wayne School District to block Sunlight’s email campaign.  Too many Wayne teachers were learning the facts about how NJEA leadership spends their highest-in-the-nation dues on excessive executive compensation and political spending and leaving the NJEA.

That’s why the NJEA created the “Member Protection Center” — aimed squarely at Sunlight — to “protect” teachers from these inconvenient facts.

That’s why NJEA leadership hides their one-percenter compensation, the highest in the nation by far.

And that’s why NJEA leadership hides the existence of the NJEA’ Super PAC, Garden State Forward, which has spent over $68 million of teachers’ regular dues on politics.  Most teachers have no idea Garden State Forward exists, let alone that they are paying for it.

The NJEA knows that when teachers learn these facts, many decide they have better uses for the $1,500 in dues withheld from their paychecks every year.  The NJEA’s self-serving actions don’t benefit teachers, who deserve to know the facts, they benefit NJEA leadership.

NJEA President Sean Spiller has boundless political ambition.  He’s run for office in Montclair since 2012 and is now reportedly eyeing a gubernatorial run in 2025.

Throughout Spiller’s personal political career in Montclair, the NJEA has been his largest supporter, primarily using the NJEA’s Super PAC, Garden State Forward.  Now Garden State Forward is spending millions on Spiller’s dark-money Super PAC “Protecting Our Democracy,” widely viewed as a platform for a Spiller run for governor in 2025.

Here’s the rub: Unlike the NJEA’s traditional PAC, NJEA PAC, Garden State Forward is funded by New Jersey teachers’ regular dues.  Teachers have no say in the matter.  NJEA leadership — including Spiller — simply appropriates their dues as they see fit.  Most teachers don’t know they are funding Garden State Forward — or Spiller’s personal political career.

Herein lies another massive conflict of interest for Spiller: He has a duty to protect his members’ best interests, but is supporting Spiller’s personal political career in their best interests?

In Murphy’s road-to-the-White-House narrative, New Jersey is growing, but back in the real world, New Jersey has one of the worst outmigrations of people and wealth in the nation.  This has been a long-term problem, and several 2022 surveys show that New Jersey continues to lose people and wealth to other states.  Over the past two years, its population has actually shrunk.

Likewise, Murphy claims New Jersey is a great place to locate a business, but for every year he has been in office, the state’s business climate has ranked dead last in the nation.

This all bodes ill for the state’s economic and fiscal future, but rather than address New Jersey’s most difficult problems and make the state more hospitable to people and businesses, Murphy is content to maintain the status quo and keep his government union supporters happy.  It sure looks like Murphy sees New Jersey as a stepping-stone for his political ambitions, nothing more.

It sure looks like the New Jersey Education Association (NJEA) is funding another dark money Super PAC, this time aimed squarely at parents running for their local school boards this fall.

So, parents, beware!  The NJEA is coming after you with TV ads, opposition research, union-friendly candidates trained and supported by the NJEA, and now with piles of dark money.

In a 2014 National Education Association (NEA) study, young teachers made it very clear that they wanted less politics and seniority in their profession, but the NJEA and NEA gave them more of both.

If New Jersey wants more teacher candidates, maybe we should listen to what these young teachers actually said.  

Follow the money! Follow what happens behind closed doors in Trenton! Sunlight Policy Center of New Jersey shines a light on our 2022 lame suck session.

Sunlight Policy Center JUST found an eleventh-hour, backroom deal that occurred right before Governor Murphy was sworn in to a second term gives New Jersey politics a bad name.

Despite Governor Murphy’s happy talk, the teachers’ pension fund (TPAF) is not healthy.

One bad year — pension investments were down -7.9% for FY2022 — forced TPAF to sell $2 billion of assets to meet its annual obligation to retirees.  TPAF is again under 35% funded, which means that 65% of what is owed to retired teachers is not funded. Taxpayers will be on the hook for the shortfall.

Murphy’s pension contributions amounted to over 13% of state budgets inflated by federal COVID aid and record tax revenues.  When those go away, such large pension payments will not be sustainable.

Teachers and taxpayers need to be told the truth.

THE POLL$ HAVE CLO$ED…. AND WE CAN NOW PROJECT THE REAL WINNER$ OF LAST WEEK’$ ELECTION…

Congratulation$ to Brendan Gill, Steve DiMicco and Brad Lawrence!

When Sunlight Policy Center first delved into the NJEA’s support for its current president, Sean Spiller’s, mayoral run, we determined that Spiller had raised $57,000, of which $36,000 came from the NJEA and its allies.

WE WERE WRONG!  VERY WRONG!  IT WAS MORE, MUCH, MUCH MORE!!

A case study of what happens when a special interest like NJEA becomes too powerful.

New Jersey’s past is coming back to haunt the present at a very bad time.

Due to COVID-related shortfalls, Governor Murphy is proposing to borrow $4 billion and raise taxes by $1 billion in order to plug large budget gaps.  Yet the governor is also proposing to spend an equal amount – $4.9 billion of his $40.1 billion budget – to fund the state’s public-sector pensions.  That is 12 percent of the total budget going to shore up New Jersey’s worst-in-the-nation public pension system.

In total, from 2009 to 2016, the NJEA alone has spent over $33 million on the wide variety of non-profits and political action groups mentioned in this report, and in many cases is a major source of funding for these groups.  When added to the funding provided by its fellow public sector unions, this massive amount of money is the animating force behind an unrivaled network of progressive and public sector union-backed organizations that reaches every corner of the state.   

“Increasing the gas tax makes sense. But it’s irresponsible to negotiate a deal that raises this tax while reducing other state revenues … And who has been complaining about the sales tax, anyway?”

— NJEA Executive Director Ed Richardson, 2016.

Apparently not Richardson. After all, he is a multi-millionaire, himself, having been paid $2.98 million of taxpayer dollars from 2013-2016. Maybe Mr. Richardson has forgotten that gas and sales taxes are the least progressive taxes. They are the same for everyone and thus hit middle-class New Jerseyans much harder than they hit a one-percenter like Richardson. Perhaps that is why he totally disregards their impact on middle-class New Jerseyans – including teachers, who make $76,000 a year. Where is the tax “fairness” in that?

There’s a reason why the NJEA has constantly pushed for higher taxes.

“The powerhouse” of New Jersey politics – that’s how the NJEA describes itself. And the facts back them up.

For more than 50 years, the NJEA has dominated New Jersey politics.

In fact, the modern era of New Jersey politics has been one continuous saga of the NJEA wielding extraordinary influence to serve its own interests. It has constructed a system that automatically and annually generates tens of millions of taxpayer dollars— presently $129 million—funneled directly into its coffers. It spends far more of these tax dollars on political action than is reported or generally known. The SPCNJ estimates that the NJEA spends about $65 million a year on political action at the state and local levels, which dwarfs all other political spenders.

How has the New Jersey Education Association (NJEA) – a private, special interest – become the most powerful political force in the state?

By rigging the system to secure annual, automatic taxpayer funding. Since 1994, over $2.1 billion in taxpayer funding, reaching a record $129 million in 2018.

Decades ago, the NJEA used it political clout to lobby lawmakers to construct a funding system that guaranteed the annual flow of tens of millions of property tax dollars directly into its coffers. School districts collect the property taxes that pay teacher salaries and then withhold the teachers’ dues from their paychecks. Over 80 percent of these dues flow up to the NJEA. School districts and teachers are thus rendered mere pass-throughs for property tax dollars to flow directly into the NJEA’s treasury. The teachers never see the money.